October 3, 2005

Upstream oil and gas sector maintains flaring, venting reductions as production rises

The upstream oil and gas industry in Alberta succeeded in reducing solution gas venting by 18% and flaring by 9% during 2004, even as it recorded unprecedented levels of activity and an increase of 1.3% in production of solution gas.

In its just-released Upstream Petroleum Industry Flaring and Venting Report, 2004 (ST60B-2005), the Alberta Energy and Utilities Board (EUB) attributes the positive results to the petroleum industry itself as well as to the co-operative efforts of the Clean Air Strategic Alliance (CASA) flaring/venting project team. The EUB is a member of CASA, whose work to reduce emissions received a 2005 Pollution Prevention Award from the Canadian Council of Ministers of the Environment.

Conservation of solution gas for use or sale reached its highest level ever (96%) in 2004, a year in which a record 18,572 wells were drilled in Alberta. The report notes that solution gas flaring in 2004 was 72.2% below the 1996 flaring baseline, compared to 70% below the baseline in 2003. Solution gas venting in 2004 was 49.4% below the 2000 venting baseline, compared to 38% below the baseline in 2003.

In the 2003 edition of its report, the EUB committed itself to finding and implementing conservation measures to reduce solution gas venting from crude bitumen operations. Fulfilling this commitment resulted in a 24% decrease in venting from crude bitumen batteries in 2004, from 288 million cubic metres in 2003 to 219 million cubic metres last year.

Even so, says the 2004 report, the EUB remains concerned about venting from this source, in view of projected year-over-year increases in bitumen production. The Board plans to continue working with industry and other relevant interests to find and implement further reduction strategies and measures.

Solution gas is natural gas produced in association with crude oil and bitumen production. The EUB has been monitoring and reporting on solution gas flaring and venting following the introduction in 1999 of its Guide 60: Upstream Petroleum Industry Flaring Guide. The Guide is currently being updated to help promote further reductions.

The EUB also continues to be an active participant in the development and progress of the World Bank's Global Flaring and Venting Voluntary Standard, which was supported in July by G8 leaders at the 2005 Summit in Gleneagles, Scotland. As in Alberta, the Standard requires that solution gas be conserved unless it is determined to be economically unviable; this economic test must be re-evaluated regularly. Similarly, any flaring or venting that cannot be eliminated will be reduced.

The 2004 report, ST60B-2005 may be viewed on the EUB Web site, www.eub.gov.ab.ca.

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